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Squawk on the Street

News/Business. Melissa Lee, Carl Quintanilla, David Faber. Opening bell market action. New.




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Cyprus 49, Us 26, China 25, America 16, Europe 16, S&p 13, Samsung 10, U.s. 10, Apple 9, Boeing 9, Melissa 8, Imf 8, Simon 8, Ryanair 6, Miami 5, Spain 5, Hertz 5, Rick Santelli 5, Euros 5, Neil 4,
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  CNBC    Squawk on the Street    News/Business. Melissa Lee, Carl Quintanilla,  
   David Faber. Opening bell market action. New.  

    March 19, 2013
    9:00 - 12:00pm EDT  

♪ ♪ ♪ ♪ the stock of the day amerisource, you're right, becky. amerisource again. >> the prompter cuts everything off now. >> walgreens and alliance will get their branded and generic pharmaceuticals from that company and you have to buy them in order to position them as the drug wholesaler. >> arianna, thank you very much for joining us today. >> thank you. it was lots of fun. >> that does it for us today. it is time for "squawk on the street." ♪ ♪ ♪ ♪ ♪ ♪ good tuesday morning. welcome to "squawk on the street" "i'm melissa lee with jim kramer and brian sullivan. carl quintanilla and david faber have this week off. let's take a look at how we are setting up course. we have a lot going on in the u.s. the fed meeting kicking off today. more signs also of a housing rebound with starts rising last
month and permits rising to the highest levels in '08 and as for the picture in europe. german confidence hitting the highest level in three months and everyone will focus cyprus and what will happen in three hours' time when there is expected to be a vote. a major bounce in japan with expectations running high ahead of the leadership change ahead of the boj tomorrow. >> the bull keeps on going after yesterday's 69-point loss and a bounce expected today as investors look to the fed. it kicks off its two-day meeting today with the best conference tomorrow. meantime, the vote is scheduled in cyprus hours from now and the latest deposit tax scheme. happy anniversary, apple dividend and it was a year ago when the tech giant announced its dividend in 17 years. will apple succumb to the bigger payout as it faces stiffer competition from samsung. lululemon doing the downward facing dog with the transparency with the iconic black yoga pants
prompting the retailer to cut sales guidance and boeing clinches an order from ryanair. of course, we begin with the markets. the dow and the s&p 500 hoping to avoid their first three-day losing streak of the year. wall street will be paying close attention in about three hours from now. that country's parliament scheduled to vote on a proposed tax on bank deposits and the controversial measure appears set to go down in defeat. here in the u.s., policymakers begin a two-day meeting in which they're expected to hold current policy. this is one of the meetings where we will get a press conference and people will be hanging on every word and every use of every adjective coming out of the fed chairman's mouth. are you expecting anything? >> i think that, frankly, we are looking at a housing rebound. we're looking at industrial production rebound. we're looking at retail sales rebound and it will be really important somehow for the fed to
be able to say listen, we still need rates lower because there are aspects of the economy that are not that strong and i don't know what the sequester will bring in the month of april. >> look, the data say things are better, and i think the fed will be under a lot of pressure because interest rates are headed higher. >> at some point the fed will have to acknowledge that -- and they have -- to your point, they changed the language a little bit. it's a moderate recovery and it's a strengthening recovery. words like that. >> right. >> at some point they're going to have to acknowledge what we all seem to know which is -- they're not great, but things are getting better. now will inflation pick up and that, of course, is the fed's number one mandate. will inflation pick up until we see jobs pick up because wage inflation comes with excess demand from workers. i don't know. that's the big trillion dollar question mark. >> commodity inflation whether it be corn or copper and the strong dollar will contain inflation that's going up a great deal.
housing is stabilizing and not really in the numbers. i want to take issue with some of what you said. i think we all think that things are good. us, but i hear all day people say things are bad and i hear the portfolio manager say things are bad. he was saying things are bad. >> and the sequester and cyprus. >> that's got to be -- if you want rates to continue to stay low and you want the fed to keep buying he's got to pay attention to a scott black on your show and not pay attention to the data as it comes out. now, it is very easy to be gloomy. i remember on sunday night, cyprus was suddenly -- cyprus was to italy to spain. it didn't happen. the people who said it wasn't going to happen are now out there being more vociferous saying it is going to happen. on thursday when the banks open we'll focus that story again. we're going to beat that story to death as if it's all that matters and in the meantime
people are making money in the market. i don't want to lose sight of the fact that people are making money in the market because then i'm not doing my job and there is a job to be done. >> two points. >> twitter is my proxy for humanity. >> really? >> yes. it's like viewer comments, right? >> people only write stuff when they have something nasty to say, generally. >> either really nasty or really good. snarkiness, sarcasm, that dominates and it's almost cool and i take this stuff and aggregate it up 30% from where the voice of the majority is because it's cool to be negative and depressing and sashing aftic and snarky. it's not cool to be optimistic. he must not know something. >> right. you're not rigorous. i think i have a better group. you have a much bigger group.
you look like a t-34. you're like a t-34. >> i've got speed, my friend. >> and i'm obviously a half track. everybody's always asking. folks, america, i'm 6'4", 230. i'm not that big. i'm not that big. >> 6'4"? >> 230. are you 7 feet tall because my co-anchor is 5'1". >> i was watching the celtics hate. >> they can use a guy like you in the celtics. >> irish guy, not afraid to throw his elbows. >> in the combine you did a 4-0. you are really an amazing guy. >> i don't think you can jump. >> i have no hop. >> it's cool to be negative. >> very hip. >> as you and i talked about it this way, if you listen to naysayers four years ago, okay? right? the people that were, like, we're doomed which i was one. we did something in my old company and it's on you tube and you can see it, blah, blah,
blah. you saved yourself a 50% loss in the equity market, but if you continue to listen to the naysayers at the bottom, you missed 100% gain. you saved 50%. >> so what are you saying? don't listen to naysayers ever? >> you have to evolve. there are people you know them, i know them that have been negative since the dawn of time and then the optimist and the hardest thing to do is to wake up in the morning and say, guess what? maybe i was wrong and maybe i looked at things differently and it was hard and we talked to the production team. for migraine of salt, i think things will get better and we started using the term hopium. >> we got in 1,100 in the dow jones average. it's higher. i could say it should be repealed any minute and it was almost repealed in the month of march 2009, but at the same time it did happen. people made a lot of money and i am stuck with the four walls of
the canvas that people made a lot of money and i can overemphasize cyprus very easily. look. churchill thought cyprus was very important with world war ii and i even gave you a historical there. there's historical. to be rigorous doesn't necessarily mean to be negative. rigorous could be positive. >> being rigorous could be we have a fed meeting, we have the cyprus thing going on. thursday could be a big day. we have bankers saying there could be a withdrawal of 10% of all deposits. why not be cautious, not saying be negative, but why not be cautious with the dow at record high. >> believe me, i don't make market calls and that's what jim does. i will say this, though. i read more history than i do financial textbooks. history is littered with people who have missed opportunities because they fought the fed and they misconstrued the american consumer.
the american consumer will spend money whenever they have and money they don't have, unfortunately and the fed has said for years we have your back. the piper will come due. i'm not saying there will not be a reckoning in the markets. >> i think we had a reckoning. >> it's my prediction, best-developer in the world because shinzo abe said i'll print money until things get better. >> that's one of the most crowded trades on the street. >> it's bigger than anything else in japan. >> some people argue for the same thing in the united states because of the money printing and these are some of the easy -- easy calls. >> i've been saying on "mad money" i don't want to catch these last few points. i think interest rates are going higher and i see the insurers going like they are and that's a sign that their portfolios are going higher and also because -- remember, if interest rates go higher they make more money on your premium. those have been the parabola
stocks and i see baltic freight go up every single day and everyone's written off china and i refuse to do that and that's a wake-up call that things are better. when fannie mae can return $60 billion to t.a.r.p. things are better. >> i certainly am concerned about cyprus, but if i only focus on cyprus then i will be mystified why the markets went into the green, and i cannot say, you know what? the market was down 2% yesterday and that is right because it wasn't down 2% yesterday. >> we actually touched green a little bit. >> i know. during "street signs" 2:00 p.m. eastern time. >> you have to be skeptical because you try to avoid bank of america at 18, but being skeptical means buying at 5. >> when everyone is too negative, it's skeptical and when everyone is too positive it's skeptical. on thursday those banks -- there
will be line, okay? i used to say at my old hedge fund, i used to say, you know what? i think the guys who are bearish are paying actors to stand in lines at banks displaying actors to stand in line for -- >> how much are they paying? >> nine bucks? >> i don't know. look, it is a very easy thing to spin negativity. >> being negative is cool. snarky, sarcastic is cool, unfortunately. >> by the way, in sports it's not. what do you make of that? what do you make of the fact that in sports is not cool? >> that's a real competitive forum. >> the nfl is important. >> don't lead with your head anymore, jim. >> apple issued a dividend for the first time since 1995, but what will it take for the company to deliver more of its cash for investors. the answers might be heightened competition from samsung. the company now confirming it is working on its own version of a smart watch trying to beat apple to the punch. vidz many times i think the
watch is a buggy whip. i do not possess a watch any longer except for an $8 watch i bought in hong kong. >> and it probably doesn't work anymore. >> it actually does, shockingly, but what do you make? i was skod "morning joe" about google glasses. would a watch make a dent in apple? because you can already have a watch and you can put your ipod minh ni a strap on a wrist. >> this is assuming that the watch is actually a watch and the watch isn't something beyond a watch and that the old apple of days of yore that innovated to the hilt and came out with something that was mind blowing and off the radar of everybody that that apple was back. >> a watch? >> in the watch forum. we don't know what it can be in the watch and we don't know what kind of data and how it can interact. >> i hear apple is also working on the i-buggy whip. that was snarky and sarcastic and i should not have done that. >> i would love to be able to come home and just say to some
device pout 30 for 30 when they do the special because i missed it. >> can you please put that on. >> when i get home have it cued up and start playing. wouldn't that be amazing? i'm not saying that this will be it, but we don't know what this is going to be. if samsung beats apple to the punch with its own watch and whether in the meantime apple will actually raise its dividend and actually be able to attract some new shareholders here. >> i would like to give a shout out to samsung because carl tweeted this out last week. samsung is one-fifth of korea's gdp now. 20% of korea's economy is samsung which is more than a percent that housing is. >> it's a huge percentage of the cosbe and you can invest in the etf and invest in korea and a big part of that is samsung, and if you're looking at samsung shares which are up 100%.
>> if you love samsung, do you short, sony, panasonic, toshiba and sharp? >> whatever happened to sony? >> it's a great company. >> let me do a cyprus on apple and maybe apple-cyprus because of the digital, seagate, cree, sandisk, should we not be talking about those? they made you money. again, there's a mission that i feel, you mentioned on "mad money," you have to point it out if only because it's so easy to fall prey to skepticism. this is a good example. which said juniper is losing share. now, you can focus that or you can say who is taking share and yesterday they had a piece saying that cisco is taking share. so i would like to present both the positive which is cisco doing well, but you have to present both. that's our job. the job to present both. maybe spain. where was santander, and why
wasn't santander down 20%? >> the one note, quickly on apple is that around noon yesterday is important and it broke its trend which had been in place since the highs in september. it broke the downtrend on very heavy volume some technicians could actually signal that it's no longer in an uptrend and it's a march toward the positive here and that's just worth noting in terms of the trading action because we did see a nice gain in apple shares and up 2.7% by the end of the day and we're seeing apple shares build on the gains pre-market and it's an interesting momentum stock and maybe the momentum is turning and certainly worth watching here. >> i think you need to see growth and the dividend is great and i want to see growth and i want to see surprising growth and i want to see quarters made. >> would you rather to see apple add to its quarterly dividend and an issue of fat, one-time difference. >> i would like to see something that blows me away. i love growth. i'm a growth-oriented investor. if i wanted dividend i would get
it from intel. capital should be returned. wyndham worldwide, number one performing stock since the bottom in march. the returned capital in buyback and it can be done that way. i would like to see growth because it's a growth stock. that's what people like about it. it was a growth stock. it missed the quarter. quarters matter and andy grove, they went toe to toe with steve jobs in walter eisen's book, but the quarterly increment, and it is a fair way to judge everybody. >> best book ever. >> apple's failed that test of the quarterly report. >> all right. coming up, is a yoga pants crisis coming? lululemon recalling pants that are too sheer. picture this. now there could be a shortage in the price of yogawear, what might that mean for the stock? we'll talk about that and tight, sheer, yoga pants, melissa. >> lulugetton. .
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falling. falling. it is recalling some of its yoga pants because of their sheerness. the move affects 17% of the bottoms it has in stock and lululemon is offering full refunds to customers. one analyst points out that the problem is that these are in the iconic black yoga pants and this follows a bleeding dye issue it had in august. is the company going through
rapid growth and they have high quality standards and this is putting strains in the supply chain. >> high multiple stock coming under pressure reports thursday. they tend to trade together. this is being knocking down other high multiple stocks. i begin to wonder whether this company does not have it together. i've been a supporter of it, but they do not have it together. >> still trading at a trailing pe of 41 and no margin for error. >> growth margin, the margin is 30% highest in the industry. which sounds like that's higher or thicker than the new pants. >> you have to wonder. isn't there one guy, doesn't he take the pants and stick his hands in and stretch them out to see if they're too sheer or not. and people don't realize until they're in class. somebody says hey, maybe it's the same way that cyprus became eight times larger than the -- there are people who don't do the job. the european regulators fell
asleep and whoever is doing the regulation at lulu has to answer for this, and i would like to see someone fired. there's obviously a real problem. >> this is their session match you are fabric and luon and if they can't get it here with their suppliers and there will be a question about whether or not they can get it. >> go to the gap and get gapbody. there are so many competitors. >> which is gap, right? >> this would be my chance. the our pants are anti-stink as anyone's. >> and see-through. >> correctly sheer. >> i know nothing about any of this yoga stuff. i'll pass. >> you impress me as a vikram. i'm sorry. >> that, too. >> cramer's about to put some stocks under the microsoft. do they look like big buys. here's what we have coming up in his "mad dash."
two-day fed meeting and we are looking like a higher open across the u.s. much more "squawk on the street" from post 9 straight ahead.
good morning. 6:24 a.m. on the west coast. 9:24 here. a few minutes before the opening bell. let's get our "mad dash" with jim cramer ahead of the market
open. >> deere and adco for ubs and they're talking about corn prices going down. >> a lot. >> yeah. much more than the consensus. i've been reading a lot about ethanol. i know you had boone pickins on today. let's throw everything at the oil and gas problem and i wonder if we're not going to burn as much corn as we used to and maybe that will drive the corn price down. i want to be careful with deere because it does correlate with corn. >> almost perfectly with ubs. watch deere today. what else have you got? >> corn is a big part of the food chain and i would love to make it so it's cheaper for food and inflation. >> good point. >> ea, electronic arts. look at this. a very nice guy bid on that, he resigns and the market likes it. now, is that correct? i don't know. i know you've been doing work on ceos who eat crow and how people like that. john, i think, takes some responsibility for the problems
at ea. simms city, we had a move into digital that no one could have predicted and a lot of the games were analog, and i think that john is the fall guy here for that particular incredible trend. although he was always too bullish. >> always too bullish. >> and he had a mea culpa. >> yes. >> watch deere and watch electronic arts for very different reasons. as we said, the opening bell is just about four minute away and get read per another big day of trading. how much will cyprus play in if at all and housing starts. big crowd here, post 9. "squawk on the street" returns right after this. zap technology.
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[ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense. from td ameritrade. >> you're >> you're watching cnbc's "squawk on the street." we are watching the financial capital of the world where the opening bell is set to ring in 45 minutes and we are indicating to have an up day across the board on wall street. the question is will we see the laggards in yesterday's session recoup some of their losses. most notably the financials and a lot of the financials were quite weak on scares about cyprus. we're looking past it a little bit at this point.
>> i think on a secondary reflection and remember on thursday there will be big bank lines and the bears will come rit baback and there's been a lot of refinancing and the banks and literally right now, citi, and bank of america doing a lot of refinancing and i do believe the commercial real estate is coming back. that's a real big play. i'd love to know how citi holdings is doing in this rising environment. >> there's a lot to like. i like citi here and there you have the opening bell here. visa celebrating five years of trading on the nyse and at the nasdaq, the academy of nutrition and dietetics celebrating national nutrition month. >> by the way, speaking of banks and refinancing, the american consumer continues to refinance their household debt either through a refi of their actual home or taking out another credit card with a zero balance or low-balance offer and transferring the balance. visa was a $69 stock two years ago and it's opening today at about $159, right? >> look at that gain. in a market where people are
still weak and we still have a tough consumer. >> remember, big international play. >> yes. much more so than ma. >> and it's just a very well-run company. >> a lot of american guys who have been good and have also been run by a foreign individual, and i don't mean to be phonetic, but this is a big worldwide company. >> i changed banks recently because my bank ceased banking so i got a new bank and the debit card was the first visa card and they were trying to make it more inroads domestically. >> and the vase and mastercard, transaction oriented and the balances don't matter as much as an american express and they get a cut of every transaction done. you pay for a quart of milk and you often just use a credit card. we're watching a lot of green here at this early hour. we have financials trading higher and bank of america is up 1.6% and a nice comeback on bac. >> you talk to a lot of people
who have a negative bet and positive bet. >> yeah. >> i think they're trying to reconcile big futures down sunday night and a lot of obvious -- and we had people, jim o'neal from goldman saying this is the end and this is the beginning, and i think that in -- i said on brian williams show right before t.a.r.p. first failed. this is about your atm and running out of cash and deep six after that and that's all right because that's what it was about, and we already had that moment is what i'm saying. we had that moment and we had a treasury secretary who was very tough, tim geithner and some people may think he wasn't rigorous enough. i was lectured by him in a very severe way that i was way too glib in saying that they weren't tough enough and they were using 1934 tests and the europeans and the regulators there are horrendous. they don't care. they let cyprus happen. we do not have that kind of
regulation here. we are much tougher despite what senator warren might say or what chief prosecutor gretchen morganson says. i think we're tough in this country. >> yeah. >> bank -- the banking system here obviously much better capitalized. fdic insurance is much more the letter of the law than in a place like cyprus and the european union and over let issue is the country and seeing whether or not they can back fdic insurance and we don't have that problem at this point. >> cyprus is hoping to raise money from their bank deposit tax because when the banks do open up and they're closed until thursday. if you're a russian oligarch with $1 billion in a cypriot bank account that is facing a 9.9% tax above 100,000 euros you are going to pull that out and go to jersey -- not new jersey, the cayman islands. >> and they will have it. >> they say it will be one time. >> they'll raise 10 billion and
20 billion. >> they'll come back and that's the issue. >> no, they won't. they'll raise 10 or 20 billion in a one-time move and they'll lose hundreds of billions and the european markets will wipe out hundreds of billions in capital. >> they're doing what they need to do to raise the 5.8 billion euros to get the imf and ecb bailout and they'll deal with the consequences tomorrow. >> this is the old imf. when the imf came to korea in the '90s. when the imf came to latin america and when stanley fisher imf came in and said, listen. here's the way it's going go. they want cyprus back to the size it should be and they're willing to take a lot of pain. >> maybe the deposits going out is what should happen to right cyprus' -- to jim's point, you should not have a system that is eight times gdp. ? how could the europeans not learn from iceland? >> they turned back the second rate increase. the europeans are truly pathetic. they are pathetic. >> and i think it is a good time for us to have a friendly
household reminder that america, you are the biggest shareholder in the imf so when we say imf, don't think it's them over there doing that to them. it is you. 17% of imf, i believe, weir the biggest stake holder. so when the imf pays all of you out there in america watching us on your barca lounger or your trading desk, does anybody buy barca loungers anymore? are paying. >> this is the imfs steel jack boot which we haven't seen in a long time. >> let's take a look at other stocks out there because there's more than just cyprus. lulugeddon, lulugeddon, the stock is down by almost 4% at this hour so that is one to watch and we're watching shares of rio, this is an interesting one. down 3%. goldman sachs cutting it to a conviction sell saying the company is far too dependent on iron ore prices which have been declining and it's going ahead with its project which would put more iron ore on the market and
not help this decline and we're seeing that stock under pressure with this conviction sell rating. >> why isn't lulu down more? it was down 60 earlier and they do report thursday and there is a positive silver lining. >> apparently the silver lining was too thick. >> not enough lining, which could be actually a selling point in the right environment. >> like a sexist environment that you bring to the show. >> they can sell that inventory to american apparel. >> i'm just picturing herb greenberg and -- >> glittery? >> can we take a look at ncfp, nancy paul, steve paul. >> one of the biggest gainers of the nasdaq on any size and they're buying back from takeda pharmaceuticals. this is a slow-bowel recovery drug. >> wouldn't you love to have them on your show? >> good for you. >> i blocked your show. >> it's getting tight. >> yeah. we are silently competitive.
>> if i was in the new lulu lemon yoga pants i would be sweating through them now. it's getting hot in here. >> i wouldn't stink. >> the market demands transparency and they're getting it from lulu lemon. >> big time. big time. >> how long were you practicing that line? >> no, i just made it up right now. >> you want to go sexist? will mandy be on lulu tonight? >> why isn't sexist? >> it could be a man or woman, anybody! >> you trash a lot of icons and idols on the show. you're not afraid! >> no, i'm not. because i'm a foot taller than anybody else on the networks. >> he would step on me. >> you're a nose tackle and at 3-4, you're going to be incredible. >> cardinal health down 6% declining on the back of abc amerisourcebergen and walgreens signing a ten-year deal so essentially blocking cah out. so that is a problem for the shares which are feeling the
pressure this morning. we should note apple, by the way. >> amerisourcebergen is moving higher. with the alliance boots in the uk. i like walgreens very much and i was initially very skeptical. that stock continues to climb higher and it's remarkable. congratulations, greg. you stood up to the skeptics including me and i got it wrong and it's terrific. >> there is absolutely an incredible move and it's not so bad that cardinal is cooling little and these stocks have been going into the session. >> it's true. apple by the way up by .8%. today is the anniversary of the announcement of the initiation of its first dividend in 17 years so the speculation has been running rampant as to whether or not apple will return more capital to shareholders either through a dividend or share buyback. no word, of course, yet, but one can hope if you're an investor. >> give you my charitable trust owns it and it needs growth to go higher.
the growth stock. microsoft and intel returned a lot of capital. harvey eisen was on the other day talking about microsoft if it doesn't do anything it will be yield and huge now. you have to do both and return capital and you have to do growth and buyback. if the stock is as big as you think you should be buying back every share. we've seen tremendous shares. >> i'm just thinking. i said this when they rolled out the iphone 5, this new lightning connector is a pain in the rump. if you have the iphone 4 you have the 30-pin connector. i was given this. i didn't choose this. so i had to go out and buy 15 different charges at $25, $30 a piece and you can get the cheap imitation, but they take forever. the battery lasts about six to seven hours and i've been an apple guy. my dad bought an apple plus years and years and years ago. the iphone 5, to me, very disa pointsing. >> i like it. >> it's -- it's not a disappointing device in itself. it's disappointing as the next generation of the iphone because
all -- it didn't add anything except for siri and even the 4s -- >> are you going switch to a galaxy s4? >> no. >> i have 20,000 songs in my itunes and i have all of my stuff and air play and beaming around music. >> and that's what dan niles was saying yesterday. >> i'm locked in. best phone i've used and i got a tester at home. nokia lumia 900 with microsoft windows mobile and i use it and it's the best phone i've ever used and i'm the only person apparently that has one, but it's a great phone. >> you didn't buy accessories at radioshack. >> what a call, downgrade on radioshack? >> do us a favor here. let's check in on bob pisani on what is moving here on the floor. >> japan is up 2% and they're just on fire. asia's mixed and europe is on the mixed side and here in the u.s. we're doing all right. airlines are roaring. banks are up. bank of america is up 1.5.
the homebuilders are up. on cyprus, your guess is as good as mine. here's my guess, at the end of the day they'll go to 100,000 euros and they'll keep that deposit on 100,000 intact. yes, they're talking about 20,000 and they'll be under pressure to go all of the way up and yes, they'll get the russian oligarchs annoyed and the exploits annoyed and at end of the day they'll get close to $100,000 and that will go a long way to calm the contagion fears. the rest of europe isn't going to be that foolish. let's move on. did you see the homebuilders? the main etf for homebuilders and that's the itd in a five-year high and housing recovery chugging along and well above estimates. here's the number. year over year. single family starts are up 31% compared to february of last year. multifamilies are up 21%. permits are at their highest levels since 2008 when with
everything fell apart and all of the indicators fell apart. household form eggs and probably the most important thing for the builders are trending up. consumer confidence is trending up and inventories of new and existing homes are chugging along. you know what? copper is at a seven-month low today. this srpt always so perfect, but copper follows china. so if you look at china this year, china's down. chinese stock market's down about 7%. coincidence, copper's down, copper is down 7% and so it's not always that perfect, but copper and china do tend to move together and with china not doing anything i'm not surprised copper is doing. on the things that annoy me list this morning. analysts that turn bullish on historic highs. it always happens, i know, it's a cliche, but in the last three days have you noticed morgan stanley now at 1600 on the s&p. goldman is over 1600. isi went to 1600 and all of
these guys were in the high 1400s and now they're all bullish and i know, i know it's a cliche. does it not amaze you how many turn bullish at historic highs in the market? another thing that worries me and not bugs me is the retirement crisis and the employee benefit research institute came out with the annual report on retirement. 57% of workers have less than $25,000 in retirement savings. less than 25,000, 57% of workers. they're living to 85 years old now and the average 65-year-old will live to 85 as a male, 87 as a female. a lot of impoverished older people are coming unless we do something about the retirement system. back to you. >> thank you. pretty sobering. we have to do something because that's who needs the help. >> read the story in the journal about how much the average american has saved for retirement. $25,000. >> income growth is nil. this is why china did something
over the weekend that get didn't get a lot of attention. they now permit parents to sue their children for lack of support. china realized it has a demographic train wreck coming that makes ours look like a flat tire. >> if you're a parent, 80-year-old parent in china, you can now sue your child because they're not financially supporting you and one wonders why when you lock at the budget, 100% of tax revenue will go to medicaid and medicare. we can be as negative as we want about this. >> i want to get a drink already because i'm stressed out. >> are you going to invest in gin futures? i want to caution people, and there are things that can go right in this country including big tax receipts and a big story in the paper about drug costs going down and i just want to stay, say upbeat in the face of the fact that on sunday we're supposed to crash and this is
not a crash. it's not a crash, but maybe my screen's wrong. let's head to the bond pits with rick santelli in chicago. >> jim and brian, it can't be a crisis because the government isn't doing anything to correct it. they always know best, don't they? let's look at a two-year chart of yields and doing everything pretty much under 2% and lower than that, but here's what's interesting. open the chart up to year to date. tell you what, if you take off the ten-year on the top of the chart and show it to a technician, he's not going to be particularly bullish on this chart and it looks like yields at least for the moment technically have topped and if you look at the boon, it's an exaggerated correction off of its levels of higher yields and indeed it is leading the ways and we've seen the spread between ten-year u.s. and ten-year european boons widen to the widest level in seven, plus years. this is not investment grade and it isn't the barclays spread and
this is an etf and it's very enlightening to look at it over the last couple of weeks going back to february because it's creeping up in a way that's similar to stocks. the stocks firm up and the reach for yield is firming up especially when all of that is going on with yields basically in the treasury and safe harbor side moving lower. let's switch gears. cyprus, a pretty big story, right? not necessarily from a market perspective and only i guess for purists who believe that you have to have some kind of bedrock principle somewhere in the equation. whether you look at the euro-yen or whether you look at the euro-pound the action there has reversed some of those markets and taken a bit more sheen off the euro currency. brian sullivan, don't worry about the future. back to you. >> what future? everything's fine, rick santelli, thank you very much. >> let's check out the latest moves in commodities and go down to sharon epperson at the nasdaq. before you hit your stories. we have boone pickins on street signs. what would you ask boone? >> well, i would ask him what he
thinks will be the impact of this renewable fuel standard and what its meaning to the refineries and gas prices as we go to the highest prices that we'll have for this season. this linsanity that people are talking about on the floor and what traders are talking about will affect consumers and i would ask him what he thinks about that. we're worried about what's happening in the commodity space. we are looking at gold prices continuing to be a safe haven and staying above the 1600 level though we've eased off the highs yesterday. still waiting for the cyprus vote and seeing what that mean space lot of traders want to be in gold for that safe haven status and not so much the retail investors because the retail investor when they look at the gld they took money out of the gld yesterday. in fact, it was the biggest daily loss that we've seen for the gld holdings in nearly a month. so that is a bit of a difference for the retail investor versus the trading environment for gold. elsewhere in the commodity sector there is a lot of talk about cyprus and a lot of talk
about what the fed may do and we're in a bit of a holding pattern with many commodities waiting to see what comes out of the fomc meeting and keep an eye on what's happening to the oil price because we'll also have that weekly inventory data in the next session and that will likely bring more volatility to oil. back to you. >> sharon, thank you, and i will steal you question. i'll give you credit, though. >> thank you. blackberry, apple and music. how are we bringing it all together? that's coming up and as we head to break, here are more of this morning's early movers.
in celebration the blackberry 10 launched blackberry execs had a cover of etta james" they released a version of keep on loving you for developers. blackberry execs covered that latest blackberry jam, what song
should apple executives record for the company's dividend announcement. you can tweet us on "squawk on the street," we'll share your responses throughout the morning. here's what's coming up next on "squawk on the street." >> coming up, are you cautiously maneuvering through this market or have you been hitting the walls? cramer will help direct you with six stocks in 60 seconds. proceed with caution when "squawk on the street" returns. [ engine revving ]
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six stocks, 60 seconds and that's why we call it "six in 60." >> the stock has dna nothing in years. i just want to buy the stocks. >> ebay. >> you have cantor fitzgerald on at 2:00. this stock has just been a one-way downturn and people worry about paypal, mastercard and it looks like it's bottoming. >> costco. >> they paid that special
dividend and the management is doing quite a good job. >> the ammo, opportunity mftic on panera bread. >> they think the valuation is cheap and good luck to you. it's a great company. >> chesapeake from stern. >> you're seeing boonepickins this afternoon and maybe he can get in. >> mclellan, and also the great-uncle of kate upton. >> really? >> i know what a family. >> norfolk southern. norfolk southern has been a one-way trip and they're a huge coal mover and so it tells you, you know what? coal is alive. >> it issa, life. "mad money" tonight, what have you got? >> we are looking at drugs and this in the paper in the new york times fabulous article about how drugs are going down, but not drugs and the stock is moving. he's the real deal. these drugs have been big winners. pay attention.
>> jim, thank you very much. >> thank you, brian. simon hobbs with a look at what is coming up on the next hour of squawk. >> good morning to you, brian. wells fargo thinks that by the end of their next year, not this one, next year, the s&p 500 would have reached 2000, in other words, there say 30% return to be had on the american stock market. we'll talk about that. j.p. morgan will be here to tell you why you should follow jack lew, the new treasury secretary when he exits china and you should get out of stocks and you should get rid of the pants from lululemon that are too see-through.
good morning. let's get to the road map for the next hour of "squawk on the street." the dow and the s&p 500 hoping to avoid their first three-day losing streak for the year. here in the u.s., day one of the fed meeting kicks off at 2:00 p.m. eastern. >> and happy anniversary apple dividend and it's been one year since apple marked the first time since 1995. will the tech titan actually raise its payout and perhaps gain a few new shareholders in
the meantime. lulugedd lulugedd lulugeddon. lululemon recalling the signature yoga pant saying the material is too sheer and there could be a shortage in the price of yoga gear. look out for that stock and its competitors ahead. >> let's get a check on the markets. remember yesterday at this time we were down triple digits and all fears about cyprus and the contagion that may not come. guess what? yesterday briefly we went positive on the dow. housing start, building permits are better than expected and hey, maybe we won't have the contagion or the vote at all on cyprus. the dow, the nasdaq and the s&p 500 are all higher and this as the federal reserve kicks off its two-day meeting and a reminder and a cheap plug for street signs and now the fed will no longer do the weird 12:30 thing and everything from the fed from the announcement and at the 2:00 eastern time. he clearly agreed you put the thing in the suggestion box,
simon and look what happened. >> we should explain that "street signs" is the show that brian anchors. >> of course, they know that because you have the smartest audience. >> of course, they know that, there may be some that don't. >> now they do. >> john manley is the chief equity strategist and he's a big "street signs" fans. what happened in the last 48 hours? sunday night we were drinking heavily because we were doomed. it looked bad yesterday and it got better as the day went on. today everything is fine. why the shift and the volatility change in 48 hours? >> no one has confidence in anything. i think if we learned anything in the last couple of months, we have more risk than we thought we had except some of the risk is to the upside. so we've become agnostic as we come to this moment in time. >> is agnostic a good thing? it is when you come out of it. >> if you come out of it. >> i think you will. this is america. if you think about it for the last four years, wall street has
been convinced that sooner or later we'll have to pay for thees anies of the last 25, 30 years so we had this unfocused dread about the future and what we didn't focus on is the future and i think we have to manage the risk and opportunity tradeoff. >> you are being very mealy mouthed for someone that has a targeted 2000 on the s&p for the end of next year. you think this will rise 30% between now and the end of 2014. that's a big call. >> that's an aggressive call and it's done with an aggressive parameter, simon. if earnings for the s&p grow 5 1/2, 6% and at the end of 2004 we put a normal multiple of 16 times earnings on it which were the last 50 years where we were against 5% treasurys and you do the mathematics and $125 times 16 is 2,000. which of those two parameters is the likely to happen? i don't see an economy that's a world economy that is growing.
it could generate easily 5% to 6% earnings growth given what we've cut to the bone in corporations. >> the economy has nothing to do with it stipes. we still aren't doing efficiencies put in place. earnings were supposed to stop growing and they have not stopped growing and we're still surprised on bounce and there's still an upward slope on forward earnings expectations and my guess is it will be more right in the multiple. >> because of europe, i think multiples are ephemeral things. they sort of come and go and it's what we think at any given time. earnings are earnings >> in terms of the sectors that will lead us to 2000. by the way, i'm curious, how often do you make projects that go so far and how often are they close to reality? >> i changed them by the time we get there. >> oh, good man. to be honest it's not that far. it's the end of next year and it's not a seven-year projection
and we are pushing it to get there. it's a symbolic thing and we're trying to show that the market at 13 1/2, 14 times earnings. >> it will be significantly higher. >> so getting back to what will lead us to 2000, by the end of next year what will that be? because right now the leadership groups are not the leadership groups that one might want out of a true growth sort of market. >> i think they'll become that. i like three sectors and they couldn't be more different. >> health care is a fantastic way to play an ultimate reality. next year, you and i will be paying more taxes for somebody else's health care. health care spending has been flat for three years and we think that changes. >> simon was right about europe and that weighs on the technology sector and there's still a technology sector upgrade and an upgrade on technology and corporations. >> what kind of technology upgrades because when you're thinking of things like computers and software and that
hasn't really, you know, helped, for instance, a microsoft. >> it's helped more than you think. it's helped other companies, as well. why are profitability numbers for corporations at record levels when the economy of the world is so clear and it's terrible and somewhere in between something happened and corporations know they were wrong and they were able to leverage the people they have and that will actually help the incremental person hired this year will probably be 1 1/2 times as productive as the person they fired five years ago and that hasn't played out yet. >> will american consumers stop spending on cars, houses a appliances you name it because of europe? >> no. ? i've seen a lot of mistakes made in 30 years on wall street and i've made a lot of them myself. the one that is to underestimate the american consumer. americans tend to consume they find a way to do it. if an enormous shock hits there
are problem, but on bounce, american consumers keep on spending. >> that's what they call a leading question in that industry. >> i liked it. >> i feel the same way. >> john, thank you very much. >> thank you. the cyprus parliament is expected to let's talk about one of those big european problems. the parliament in cyprus is expected to reject that controversial tax on bank deposits in a vote set for noon time eastern today, new york time. if that does happen in theory, it would push the small island nation into collapse. she joins us from london, welcome to cnbc and it's nice have you back on again. >> thank you. >> if anybody should know what is likely to happen at midday given the reporters and agencies into which you can plug, it is you, jillian. what do you think will happen today? >> well, the one lesson we've learned in the last few month from the eurozone is expect the unexpected because the
likelihood is the parliament will reject this deal, but frankly, if they do reject the idea of trying to put some kind of tax on the positives, the question really is what next? because germany and finland have made it very clear that they don't want an open-ended bailout of cyprus, but if you don't have more support from the outside, cyprus has one of two choices. it would rather hit big depositors, russians that put money in the cypriot banks big time and that could cause a real capital flight or it will have to take the very unpalatable decision to let the bank go. >> i read who you have in berlin, one of the great assets of "the financial times" is there any point on having a reality check in what is going here and what the germans are asking them to raise in cyprus is little more than 5 billion euros and isn't berlin like a dog with a bone on this idea of
sacrifice even if they could blow up part of the eurozone system? >> exactly. the kind of money we're talking about is actually not that big in terms of the amount of money needed to bail out cyprus. my favorite half-joking solution would be to turn cyprus into a giant club med, give german pension vouchers paid for with public money to go and spend in cyprus and deal with the imbalances in the eurozone, if you like, but more seriously, the issue is germany and places like finland and don't ignore fin lann because it's quite important as a conscience of the northern part of the eurozone, germany is simply fed up with moral hazard and german politicians know that they simply cannot sell to their own voters a package which is perceived to be bailing out the southern europeans once again. the problem, though, is that the germans don't want to see the eurozone break up in general and they don't want to actually accept the fact that actually the whole of the eurozone these days are built on moral hazard.
so you have this fundamental political conundrum which is without engaging on the moral hazard, unfortunately, issue like cyprus will create once again the stability of the eurozone. >> bottom line, will we wake up one day soon and find that this tax will be implemented in italy, spain, greece or even france or germany. >> that's obviously, the great fear that's hanging in the air right now and that is exactly what would spark this contagion threat. think about for a minute in america. you have the fdic in america and people know that if they have their money in american banks up to a certain level which is fdic insured they know they're safe. up until now, people in the eurozone have kind of thought that was the case in the eurozone, too, up to 100,000 euros. that was a magic number. what they discovered in cyprus, however is that rule is being
flouted. so people will start saying what about spain? >> isn't that the commentary from 24 hours ago? isn't the cutting-edge commentary to say look at the power of the pushback against the idea that you don't guarantee 100,000 euros and isn't that a positive sign? aren't the germans actually in retreat going well, actually it's up to the cypriots to sort that out. i'm fascinated to reading your notes that you actually think that this could be a situation that was similar to the assassination of arch duke ferdinand 100 years ago which plunged western europe into world war i. you really think it's that serious? >> no. i expect the eurozone plunge into war. what i was trying to say in those notes is simply you can have a small event in a faraway place that seems very obscure, like a pebble going down a slope of snow can suddenly start an avalanche and in a sense the concern is that what cyprus has exposed are two things. firstly, that there is no common agreement across the eurozone on
how to deal with the issue of moral hazard. right now you have very big splits between germany, france and other countries about what they're going to do and to what lengths they're prepared to go to keep the eurozone together. secondly, and much more practically, there is no fdic system in place in the eurozone. one of the thing as it allowed america to essentially heal the scars from the terrible financial crisis of 2008 was the fact that america had a time-honored fdic system. you could calm down consumers in america in a moment by telling them that accounts were fdic-guaranteed. you do not have that system in place in the eurozone today because there is no agreement between the eurozone governments about who would actually pay for that system. >> sure. >> they started talking about trying to create that system a few months ago and frankly, it's very hard to have a single currency function without that system in place. and there have been no agreement. >> and now they're driving in exactly the opposite direction
and the banking union is not about to happen. >> jillian, fascinating conversation. >> they make the policy on the fly. they make the policy on the fly and that's what's so dangerous. >> it's a small enough country to bully and its banking system has so much dirty money in it. thank you very much for joining us. a view there from "the financial times" in london. thank you. still ahead the central bank on center stage and we'll talk about the fed, the exit strategy and bond buying, plus lulu lemons yoga pant shortage and what it means for the stock and its competitors and it's been one year since apple announced its dividend. is a hike coming soon? we'll talk about that next. but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary.
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one year ago today tim cook one year ago today tim cook announced a buyback. let's take a look at apple today. could a dividend increase be in the cards and will joins us now. will, this is the talk of the town. well, the town being wall street to whether or not apple will do this. any indication so far? if apple were to do it does it make sense in your view this it would be done around the anniversary because that's the consensus thinking at this point. >> good morning, melissa. i don't think there's any question that we'll have an announcement at some point. we on the street have been expecting something any day for the past several weeks and you've seen in in the recent price action both speculation regarding a potential bigger dividend and probably more importantly, a sizeable buyback.
that's the biggest driver right now around the recent stock action. >> the problem, as some might point out, even if apple does this and say they do a dividend plus a buyback. the bigger problem here is they don't have growth revenue. growth rates are decelerating that the point and they're entering what could be a weak quarter because of competition from samsung which will have free reign of the market until apple comes out with its next phone and at the same time if apple is coming out with another phone soon there will be a drawdown in sales because people are waiting for the next one. is this a sustaining bump to the stock, in your view? >> this is more trading action in the stock as opposed to something that's sustainable. i think what you can ultimately see is something similar to what we saw last year when we saw the run-up in the cash distribution announcement and the stock pulled back into the timeframe. i think one of our core concerns is the march quarter could be
okay and the street estimates are too high and to give you an example and the street's calling for them to decline 5% from the march quarter to the june quarter and ours is closer to 15% decline. so my concern is the june quarter guidance disappoints and the stock weakens again. >> will, on the broader question of technology and obviously we'll see exactly what happens. there is a fascinating article in "the financial times kw "about the tech companies. overall in corporate america you have 1.5 trillion in cash reserves. >> right. >> over the last three months it's technology companies in particular that are swelling their cash reserves. so for every $10 that we gain for cash reserves for american companies $6 is coming from technology. why is that? is it because they are better able to cheat the international tax system and not pay tax around the world because of the way that they play with intellectual property? >> simon, that's a good question. i suppose there is no easy answer and it's probably a
combination of things. tax laws probably help and one of the reasons that cash continues to build is they don't want to repatriate it back and pay the taxes. that's an enormous issue for apple that's close to 70% of its cash overseas and it's not an easy answer for that today. and it could be $170 billion by the end of this year says the financial times this morning and what does it mean for the sector moving forward? so far it's disappointed many, many people. >> i guess the question is how do they put that cash to use? many of us would like to see greater buybacks and greater dividends and could there be more m and a coming which would be positive for the market. in the interim, stronger dividends and stronger buybacks is something that should help at least on the margin. >> let's just say, will, ceo tim cook picks up the phone and gives you a call and says hey,
will, what do you think we should do with our cash? what would you tell him? >> i think they should increase the dividend moderately. they're generating $40 billion a year in free cash flow and that could be a 15 billion number and maybe even a $20 billion annual dividend. >> let's say tim says no, will. we want to return to capital shareholders and we want to also accelerate our growth. what would you say? >> that's a good question. the reality is, you know, i guess they can increase and spend it in rnd and this is a company that wants to focus a few great product, right? i don't think there's that much more they can do to the rnd engine, per se. they can look at big acquisitions and that hasn't been a part of their dna and that's not something i would encourage at this point. each if they were to buy something like the rumored netflix or twitter. i would look for a buyback like warren buffett in some respects and doing a $50, $60 million
buyback. >> we'll leave it there. >> thank for having me. >> will power. >> we're up 50 points on the dow. jpm securitying taking a look at the internet sector. >> hi, simon. you see google enjoying a pop here and that's why analysts initiated coverage with a positive view. they like aol, ebay and google which they rate outperform price target at 955. i speck to scott redler of t3live and it's constructive that google held at 8:09 yesterday and now he wants to show it above that to show real commitment. there's short-term resistance around 819. 52-week high is 844. back to you, guys. >> ben bernanke set to meet with the inner circle today. the beginning of the two-day meeting and it's one of the most interesting fomc meetings in quite a while. on the agenda, what else? euro europe, the fed's exit strategy,
how much more will they spend and a preview of what to expect after the break. plus, the home building sector up more than 70% over the past 12 months and is there time to still raise the roof on your portfolio or has the rally peaked? and keep it locked to "squawk on the street," a bit of cable news news, liberty media announcing it will buy a 23.3% stock in charter. gregory maffei for an exclusive interview. former microsoft guy. we'll hear what he has to say coming up. ♪ ♪ i don't want any trouble. i don't want any trouble either. ♪
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one day one day losing to indonesia's lion air, ryanair announcing a big deal with boeing. they will buy 175 jets for $15.6 billion. phil lebeau, i have to imagine that in the wake of yesterday's lion air news, the ryanair news has got to make boeing feel pretty good. >> it does, and it's not completely unexpected. we've been expecting this announce am. let's take a live picture of waldorf-astoria and this is michael o'leary, the ceo of r n
ryanair, announcing why it will buy the next generation and he started off by saying you want to know why we're successful? we only fly 737s and we know how to run our business at peak efficiency and the president and ceo of boeing will be talking in just a little bit. let's go down with what this deal means for boeing and for ryanair and for boeing it is a huge deal. 175 of the next generation 737s. the list price is 15.6 billion, but as we say, whenever we, announce these aircraft sales they never pay list and it will be a big discount from the 15.6 billion. some of the new models will be replacing current 737s by ryan air and this sale keeps a longtime customer with boeing. ryanair is to europe what with southwest is here in the united states and only flying 737s and that's what makes the deal work for them. boeing recently moved 737 production up to 38 per month as
they continue to make this the bread and butter aircraft. real quick, let's take a look at shares of boeing year to date. they've had a decent run within the last couple of weeks moving up substantially up to more than $85 a share and real quick. let's take a look at the transport, guys because the transports on the strength of the airlines and on boeing have hit a new all-time high, up again today. that's a heck of a run that we've seen, brian and melissa over the last, what? four months, five months by the transports and hitting a new all-time high. back to you. >> phil lebeau, thank you. >> with the fed's two-day meeting kicking off today, no better time to reveal the exclusives of the exclusive cnbc "fed survey." steve liesman has been kraufcrug the data. >> the outlook is for more qu t quantitative easing and the $17 billion of qe this year. i want to share with you the
responses of the 54 survey takers on the issue of the markets and it's very interesting what they're protecting. what you see here is over the course of the surveys we've done. july, september, january, march. what the projection is for the s&p in june. and nick, if you wouldn't mind just zooming in. they thought back in july 2012 the s&p in june of 2013, it was 1451. move on 1497. 1480 and 1505 and this number is absolutely incredible. for 1539, the projection for june which they took the survey back on last friday, their projection is below what it was at the time that they took the survey and then here's the new data. information for the protection for 2013. 1547 to 1589 and then just zoom in here. so they're saying the s&p will fall about half a point between now and june and rise by three percentage points between now and december. let's move on and look at the outlook for bonds and not a whole lot of change here and the
projection for june 2.09% and for december, 2.35 and fed funds, very little changed and .2 by the time the end of the year rolls around and some additional information on the market outlook. we asked why has the market done so well? let's start over here. 12% say it's because of financial stabilization or 18% is from earnings improvement. 24% is economic improvement, but they say 28%, the number one reason why the market has done so well is because of the fed. this could be low compared to some. we think that it's all been a fed-led rally, but our participants are saying there's more behind it than just the federal reserve. i want to share with you the information about what people are saying about the exit strategy. this is a change. we haven't asked this before, but i'm pretty sure the market did not think of this ahead of time. 53% saying that the fed will exit when it gets done raising its balance sheet by not sell anything assets and that coming
from testimony fed chairman ben bernanke gave before congress last year. i want to give you this one quote from scott ren. very interesting comment on the market. for the first time in this four-year rally, some investors are beginning to chase the market higher. in addition, everybody is looking for a pullback when you combine those two items with an economy that is solely improving and extremely easy for a long period of time and the path of least resistance is up and melissa that's scott rant's take on why this market has gone higher. back to you. >> many people would agree with scott wren. >> we have adrian mowat, the j.p. morgan equity strategist. he says a nasty combination has led him to downgrade chinese equities and find out what he's talking about next. he's making his first trip to china as u.s. treasury secretary. we'll have the very latest right after this. ♪ ♪
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some some troubling headlines from china and this time it's from j.p. morgan downgrade from china. it is recommending the banks as a short. adrian mowat is from j.p. morgan and made the call yesterday and joins us now on the news line. adrian, always a pleasure to speak with you. >> hi, melissa. >> you say momentum is growing
with policy signs constrained and that makes for a nasty combination. what in the data are you seeing that makes you think the momentum is slowing and we talk about policy responses. is that specifically stimulus? >> that's correct. so the key data points are that the pmis have been ticking down and they only hit a high in this particular growth spurt of 50.6. retail sales is also losing momentum and industrial production which has been running at double digit levels for many years and is now down in the single digits. that's the momentum slowdown and this is off of a very significant stimulus that occurred last year. with regards to policy constraints, the bboc on two occasions highlighted the concerns about inflation. he is the only senior official
allowed to stay on after his 65th day. maybe that's also indicating some concerns about maintaining continuity. we'll see. so when we look at china today we're more nervous about it back in june when growth was slow because back in june last year we were wait for example stimulus. we had a stimulus and it doesn't seem to have had the followthrough momentum. >> the recent measures, adrian, the chinese government to cool property prices to increase, for instance, the amount that people have to put down for their houses, i'm curious, immediately it may cause a blip in the stock market as we have seen, but longer term, is this a positive for the chinese economy or do we need that sort of -- that sort of enthusiasm in the economy in order to keep the stock market going? >> i think the chinese authorities are very right to be concerned about bubbles and the property markets and they need to control this. the problem is a broader story when they try and stimulate
growth it's the usual stimulus. every time they do it the economy becomes less balanced and more dependent on investment growth. unfortunately, what china needs to do is to allow its economy to slow down and some are quite robust and we need to be more careful in the allocation of capital. >> adrian, the new treasury secretary jack lew has obviously been meeting with the new leadership in china. we should note, as you mentioned that we do have new leadership in china that they're looking urgently to rebalance in so many ways. >> what do you think the takeaway would have been for the americans at that meeting? >> well, i'm not really sure that american policymakers have much to say here. the new leadership is an inherited an economy that's 49% investment in the capital formation and an extremely high
number. it's an economy where consumption is strong. the problem is they need to allow fixed investments and begin to fall and just accept a lower growth rate and it's something they can do because the demographics will still have a tight labor market each with the slower growth rate and i think there's this danger that they got caught up in the headline gdp number that they're not willing to look at factors like demographics for a slower growth rate. >> we'll leave it there. thanks so much for phoning in. we appreciate your time. adrian mowat. jack lew is traveling to china, and it is his first overseas trip as u.s. treasury secretary. eamon javers with more on what the treasury secretary will be speaking to china about when it comes to hacking. eamon? >> hi, brian. as you say, it is one of the most important and tricky rirps in the geopolitical world between the united states and china.
jack ward, the newly sworn-in treasury secretary making a point by making his first overseas trip to china as you see there with president zi gin ping and the newly elected president of china. government officials telling us the meeting lasted about 45 minutes and it was a warm and wide-ranging discussion as they say in the official readout given to reporters. secretary lew we are told raised several issues including the exchange rate, intellectual property, cyber security and north korea. other than that, we don't yet have a whole lot of information about this meeting which took place overnight east coast time in china yesterday. the key here, warm and wide ranging discussion, guys. this readout is given to us in diplo speak. if they say anything other than a warm and wide-ranging discussion then you think there might be trouble in the horizon and the meeting went well and that's what we know as of right now. >> eamon, thank you very much. >> you bet. >> closer to home, lululemon is
down nearly 12% in the past three sessions posting its worst three-day loss since the beginning of august. as you may be aware by now, lululemon is recalling black yoga pants that were unintentionally see-through. the problem affects 17% of the women's pants in its stores and will cause shortages to the staple. the recall has caused lululemon to cut the revenue forecast. >> roxanne mayer is analyst at ubs and lowered her price target as a result of the recall. roxanne, did you get to see these new pants? >> i haven't. i think they're probably a representation of their typical core pant program, and obviously, the latest batch that's come in between march 1st and march 17th do have the apparent see-through issue. >> i find it inexplicable that you have a product that is so core to a business like this at lululemon if it is 17% of their
stock and it was not quality controlled to a greater extent. i know people are saying this is a one of item. don't worry about it too much. to me, it seems endemic to a lack of control within lululemon and raises questions about its supply chain because before there were problems with dyes, have there not? >> yes, was there. last spring at this time there was a pink top that did tend to bleed quite a bit and caused quite a stir in the first quarter so here we are again with a major category that accounts for 17% of their bottoms that has this see-through issue. you know, we haven't yet heard from the company what the source of the problem is. it could very well be that it is part of the growing pains and hiring an increasing number of executive to its sourcing organizations and it could be that there are aren't people on the ground in asia doing that quality control. >> it really isn't difficult to pick up the garments and see that it's see-through. >> i think it really comes down to trying it on and determining
that that's what's going on. >> i think the bigger issue for investors, roxanne is when you buy a company like a lululemon with this kind of multiple, you're paying for growth and this throws into question whether or not the company can, in fact, grow at the rate the market wants it to grow at at the same high-quality standards and are those questions in your mind at this point in terms of the trajectory of lululemon and what we can expect. >> we are calling into question the growing pains that the company is certainly undergoing. what's really clear, though, is that the demand is out there and in some cases they're not keeping pace with that demand. it's important to keep in mind that up until march 1st comps were running up 11% quarter to date. that bucks the trend of the entire retail industry when you think about the macro issues going in february. the adverse weather that was there. so the underlying business is healthy. there's a ton of consumer demand
and they continue to be the leader in what is the single best growth category in apparel retail. >> i understand you haven't heard from the company at this point, but what is your general take on whether this company can handle this hit which is as you mentioned and simon mentioned the second hit in not too long of a time period. >> yeah, i do think they have their work cut out for them in terms of getting their arms around what the source of the issue is as it relates to the supply chain. this could cause a disruption to 2012 or at least the first half. i don't think it derails the longer term growth story where they've been executing very well these past few years on both domestic growth and what's about to be embarking on an international growth strategy. admittedly, recent growing pains that they have to deal with. >> just remind us what the price target is, roxanne, from your point of view. >> we lowered the price target from 82 to 77 which is 27 times our 2014 estimate. >> good to see you. thank you very much. you've made your case very well.
roxanne mayer there joining us to talk about lululemon. >> did you manage to stock up, brian on the black pants? >> he stocked up on the transparent ones before they were recalled. he wanted the transparent ones. >> you have to be quick these days like the cabbage patch kids or the $50 wedding dress. >> they will at some point become collector's items. >> some people want that level of transparency. >> housing starts rising yet again in the month of february as new permits climb to the highest level in 2008. after the break, more music and find out which home builder could build you the best profit or is it time to book profits. plus an exclusive with the liberty media ceo. we're back after a quick break.
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february february housing starts rose and new permits for construction climbed to the highest levels since 2008.
our next guest says publicly listed homebuilders will outperform the broader market posting a 25 to 30% rise. home builder analyst of rbc capital markets and a familiar guest for all of the streetsigns viewers. don't roll your eyes at me, melissa. >> this is the most familiar guest on this show, as well at this moment. >> i don't get overtime. >> a little bit of respect for the company you keep. >> this is "squawk on the street," second best show on the network. let's talk about homebuilders. >> all right. >> derailing me here. i lost my train of thought. >> yes. what will be the best home building stock. >> we like pulte. >> not lennar anymore? >> lennar is fantastic, best risk-adjusted return and they're reporting tomorrow and we think they'll get an 8 to 12% improvement and we love lennar's story. it's a wonderful two to five-year holding and we love
pulte because putty is a turnaround story and it's a key driver. >> what about average home prices? toll, we know, much, much higher. lennar, from what i understand is a higher price point than pulte, maybe i'm wrong. is this a call for the consumer at any specific level of the housing market. >> what we saw today, 915,000, up 20% year over year is a huge move and what we do have is a march to a million starts. the march to a million is crucial. it's a psychological dam that will break and will unleash pent-up demand. low interest rates, increasing consumer confidence and we have tons of tailwinds. the whole sector will do well. we're looking for 15% upside in 2013. >> a million stocks, what was it back in 2007? >> roughly. probably 1.75. >> so we are half way back to where we were. >> the issue is that the stock price as we all know have done so well. homebuilders' index up 75% for
the last year. even jim cramer says this is now two hot and they can't keep going. >> i'm going to push back there and we're looking for a 15% upside there. what we have that's different is 2012, all about volume recovery. 2013, all about price. look for double digit increases in new home prices. >> and is that not factored into the move that we've had so far on the stocks? >> this isn't a developing story. we think we're early and you'll have a momentous improvement in new home price and existing home prices will improve. >> in terms of the double digit increases in housing prices, what part of the market will we see that in the most? >> great question. is that with the consumer in this economy and whether or not that kind of consumer is doing well or trading down or hit by the payroll tax increase, et cetera? >> we have two things going here. one, we are bullish on the sand states. and they were hit the hardest and they'll come back the fastest. arizona, california, nevada,
florida. you want to be in these places if you're a home builder. we're less constructive on the northeast, okay? but we like the sunbelt state as a recovery play and the other big talent is the fed, right? and the fed is doing everything it can to help the housing market improve and that's a long-term, improve. that's a long term sustainable tail wind which will drive volumes and give a tail wind. >> going back to my question, the kind of consumers who will buy the homes. first time home buyers, do they have the credit to take advantage of the easy money standards hat this point? >> yes. and we think concerns about credit limitations are overstated. she's a major member of the fmoc. >> we should begin to not trust her. >> i'm trying to reinflate the bubble. our view is the reality is you
can get an fha loan. put down 3%. this is widely available. we could not have the numbers we saw today if credit was as constrained as people say. our view is, hey, the long-term average since 1991, 1.4 million starts. we're going to be there in 2014. >> it's harder to get a mortgage for 800,000 than it is for 200,000 because of the faa backing. >> absolutely. >> who will be the first home builder to roll out two new models that's what needs to happen. he's a horrible person. >> we're going to have a statue in front. >> thanks very much for coming in. up next, it's day one of the fed meeting. who better to talk about treasury and yields than rick santelli? and later, big banks under pressure following the selloff excuse, although bouncing back
slightly today. is this a buying tonight that you have been waiting for? we'll show you how. "squawk on the street" will be right back.
let's get today's edition of santelli exchange. i know we show a lot of charts, but let's keep this really simple. the last time we closed above a yield of 210, well, it's been 11 months. what about 2.5%? 19 months. 4%. and i used to trade are treasuries in the late '70s. 4% was considered a low yield. it's been 52 months since 4% or higher kwloclose on ten-year yi. let's look at the context of debt and the context of today's fed meeting. the real plan is two-fold. of course, to make it so treasury and the government can
spend but keep the debt at a low level. but also think california. think illinois. think underfunded pension liabilities. it's monstrous. how are we going to fix this? bailouts didn't get a good reception. i don't know if the states come knocking if they'll get the answer they want. however, part of the plan many say if you inflate and push equities higher, you will win the pension fund. pension funds and insurance companies, holdings of debt have gone from about 20% up to 30%. and their equity portion has gone from 60% down to about 40%. so let me get this straight. if the reflation trait is meant to help the pension funds and interest rates are really low, these numbers aren't really working out according to the plan. now let's go more retail and talk savers.
people like my parents. like your parents. well, the savings aren't doing very well. in the context of today's wall street journal, that isn't really a good thing. it seems a lot of the fed programs are in a way taxiing savings. wow. where have i heard this before? cypress? back to you. okay. >> thank you very much, rick. still ahead on the program, a live interview on the way they announce the 27% stake in cable. we're back after a quick break. military families face, we understand. our financial advice is geared specifically to current and former military members and their families. life brings obstacles. usaa brings retirement advice. has an equally thrilling, lesser-known counterpart. conquer them with the exhilarating is 250. get great values on your favorite lexus models
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call 877-242-usaa. it's always fun having sullivan here. even though we bust each other's chops. we've known each other so long. >> like a day off. >> she knew me when i was 50 pounds lighter. isn't that amazing? boone pickens gets criticized for being general, not specific. we're pressing him. he has three golden rules for energy. specific ideas. we're going to press him. what's the name of the show? 2:00 eastern. >> closing bell. >> the h lead variety hour.
>> fast money is at 5:00 p.m. eastern time. it goes fast because it's so enjoyable. >> we'll see you on street signs. >> thank you. if you're just joining us, good morning. this is cnbc. here's what you may have missed if you're just tuning in. welcome to hour three of "squawk on the street." here's what's happening so far. >> the biggest threat that we're facing in the future is we still have 25 million people underemployed or unemployed. >> february starts the seasonalized, annualized adjusted rate. >> 7500 aircraft ordered this morning. all boeing 757. i think it's a good news day for boeing. >> i don't want to lose sight of the fact that people make money in the market. i don't want to get caught in an obsession with cypress while
people make money in the market because then i'm not doing my job. there is a job to be done. would you rather see microsoft add? >> i would like to see them invent something that blows me away. five-point growth. i'm a growth oriented investor. i can get good dividend from intel. >> what a call by merrill lynch. downgrading radio shack? >> yeah. >> from what? >> still too early to buy radio shack. >> they hacyprus has one of two choices. it's going to have to take the very unpopular decision to let a bank go. >> good morning. we are live here at the new york stock exchange. let's get you caught up on how the u.s. markets are fairing. and we are dipping into the red with the s&p 500 down by just a
point. the dow hanging onto a gain for the session, up by 14 points. a few home builders on the rise after an upgrade at raymond james. upgrading to a market perform and up grading toll brothers to a strong perform. and the stock of electronic arts spiking on news the ceo is stepping down. reports will come in on the low end, pushing the stock back to the red. down by almost 19%. the dow is still in the dreen, just for the first time in three days as the unrest in cyprus continues. we prepare for today's fed meeting. how should you play stocks through here. plus, are the big banks here safe? find out which ones have the most exposure to europe. then our exclusive interview with the ceo of liberty media. we discuss buying charter.
why is malone getting back to cable? and plus what he sees for the future of the media industry. but first to markets. major indices trying to avoid three straight days of losses. as they are closely watching the fed, let's bring in mark, the director of client investment strategies with russell investments. the managing director with web bush securities. steve, i'll start with you. how do you read the market's reaction to the cyprus move in the news today? >> i think cyprus is a one-op deal. very different than the other european countries. the banking industry is such a big percentage of what goes on there. i think people were initially scared by the quote/unquote deposit tax. now the feeling is it's a unique solution. it's one we won't see in italy, spain or portugal. so i think the market said, well, it's okay. we can live with this. we don't think it will get repeated. certainly in the united states.
the european indices have had more of a decline than we have. but we're sort o o whistling pat this graveyard, so to speak. >> mark, i think you fall in the same camp as steve, in that you think cyprus is small. c contagion is not such a big problem. financial is a sector that really has traded of late along with european woes. >> yeah. first of all, we would agree with that and we would agree with steve. i'm surprised the markets didn't sell off more on it yesterday. this isn't about cyprus. it's all about keeping it out of italy. and it's all keeping it out of spain in those areas. so a pretty calm reaction. the financial weight has been moving up over time. i won't be surprised to see that trend continue. this is not about cyprus. this is all about broader europe. so far it seems to be contained. >> steve f you look at the cnbc fed survey out today, of all the reasons the market may rally,
it's the feds that they site as the biggest reason for that. we have a fete meeting that gets under way today. the problem is since the fed last met, steve, the day just got better. does that mean when they come out of the meeting they will v to signal they are more inclined to exit qe? what would that mean for the market? >> i don't know. simon, you've been o the issue for a while. i completely agree with you. everyone is banking on the feds keeping the interest rates low. in my mind the reason is we've had zero on a short-term basis. economy has improved, not greatly, but it's improved ha little bit. at some point the fed has to start moving interest rates back up. if that were to happen sooner rather than later, it would be extremely helpful. >> it's not actually the action of that. it's the hint that they might, which is what we saw the last time around and the market shifted for two days.
>> exactly. we had those comments. we has those comments talking about this. it was the first time it was broached. the market took a big swoon. and you're absolutely right. we could very easily seize this again. but they're aware of that as well. it wasn't lost on them. so i think they will be very careful with what they say. at some point it has to come to fruition. they can't maintain the policy forever. but they know darn well that if they put a comment in that there makes it sound like they're going to withdraw policy that's going to affect the security markets greatly. i don't think they want that so i don't think they'll do it. they'll continue with language that says it's going to be qu forever. we're continuing indefinitely. i don't think they're going to do it yet. >> you're saying they might have to bend the truth to keep the market from falling out of bed. they are being so transparent on their projections of where
interest rates are going to go. they've kind of taken that ability to ease people back on the way out of qe, away from themselves. >> point well taken. also they talked a lot about employment numbers. that's the target where we should be shooting at. i mean, simon, they understand, if they make some kind of tent that they are going to lower policy, you're going to see a terrible impact in the securities mark. that's going to ripple down and have an effect on the economic recovery here. and i think they're very koshsz of that and don't want to see it happen. maybe we're going to agree to disagree, but i don't think you're going to see it from the fed in the future. >> mark and steve, we have to leave it there. thanks for your time. >> thank you. >> let's get to the growing competition between apple and samsung, or the perception of
growing competition. just today samsung confirmed it's developing a wearable, digital device similar to a wristwatch. something that we already know that apple is also attempting to pioneer. dennis is the marketplace editor and columnist with the wall street journal. nice to she you on the program. >> good to see you, foo. >> what would this digital watch from whoever looks like? what would it do? >> it's hard to say exactly. some of the reports basically suggest it's an adjunct to your smart phone. it works as a mini interface to everything your smart phone does. the real potential for these types of devices is really to serve as a sensor. not so much what it's telling you, but what information it's collecting. at a fitness monitor, a nutrition monitor. all the things that are now separate devices can become a linked device and turn you from a man to a machine.
>> that's actually the reality of the situation right now, dennis, in case you didn't know. getting back to the information -- >> thank you. >> any time. >> going back to this the information that this watch may, in fact, collect as a consumer, i would be concerned about privacy and what happens to this information, which would make me more reluctant to strap this thing on my wrist and let it monitor everything that i'm doing. >> people have been talking about privacy for the last 15 or 15 years. and every stop of the way, be it in terms of location active on your cell phone or things you disclose on facebook. everything step of the way the consumer behavior says people don't care as much about privacy if we think they do. if you can provide a benefit for them, they will probably take it aup. the same will be true on smart watch. whether samsung or apple. people releapt and their behavior changes. >> if you're 17, you probably don't have many secrets to get
out. >> no. >> dennis, just before you go, is this wristwatch, as you foresee it, sa huge revenue driver? >> el, there was an interesting estimate in a bloomberg story. about a $6 billion market. the watch market overall, not smart watches is basically zero market. the watch market is $60 billion market. it seems plausible to me that both apple and samsung can get a big chunk of that. >> you're not suggesting that? >> probably not. those are obviously pieces of jewelry, swatch group. the big swiss company has basically a strong l old by the control of the movements inside. that company has done very well. >> what kind of market are we talking about? something more than casio but less than a cartier? >> i would think so.
one other thing to ponder as we speculate, is how did the two companies differentiate themselves? as jim cramer said earlier in the promo he wants ap toll bring out a program to wow them. samsung has shown it can do just good enough to keep pace and that, to me, is going to be the question. >> is there more meeting? >> but that's proven effective. >> >> except in that sense it led the way. >> yes. although i have to say the presentation at radio city music hall we bizarre. >> kyle loved it. but he does like a tap dance, it has to be said. >> sor well. 're going to see stuff this year, i think, and it's going to be interesting. what it means about how we change our behavior.
>> dennis, it's good to see you. thank you for your time. >> thank you. >> carl is not here to defend himself. >> he would say -- he has admitted it on national television, didn't he? >> no, for kids' dance. >> some sort of song and dance. >> let's send it over to josh lip on the for market flash. >> cliffs national resources down hard today. a couple of things going on here. we have seen a general weakness when iron ore gets low it can mean rough sledding. stocks down 15% over the past months. another reason, cost overruns and the biggest expansion, bloom lake in canada. they raised about a billion to pay down debt. the stock at a three-year low. >> josh lipton, thank you.
if the problems in cyprus spread, are u.s. banks safe? first, rick santelli, you're ready to talk housing here. >> absolutely. treasury prices are moving up. those are the futures market. yields moving now. we'll continue to talk about the exchange today. treasuries, detd, risk, leverage, all of this on the first day of a two-day fed meeting. we may talk spanish cds. ♪
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will will europe's problem spread to u.s. banks? can that really hap? jason goldberg is a senior analyst with barclay's. really, when you watch the news coming out of cyprus yesterday, were you concerned for the stocks you cover? >> no. the u.s. banking system is on much stronger footing than it has been in a long time. record capital. record liquidity. increasing earnings. >> why did the stocks fall? >> i think the groups had a nice run. you had the stress test results
come out thursday night and the group ran up going into that you had the stocks take a breather. if you look at the screen today you're back in the green. >> what do you think happens from here? >> now to the end of the year, we think the group laz the capacity to continue to work higher. results coming out of the stress test. majority of banks when you increase the dividends are buying back stock. we expect growth. >> how much higher do you think the stocks can move? >> i think, you know, a lot of that depends on what your macro economic assumptions are. right now they are putting up decent numbers despite the subdued dres vats. if we ever get the u.s. economy back working to higher interest rates there's a fair amount of upside. >> jason, i want to ask you specifically about morgan stanley. morgan stanley is always used for a proxy of what's going on in europe. rightly or wrongly. is that reason enough to stay away from this one simply
because it is being thrown out with the bath water, so to speak. that seems like the stock that always takes it on the chin. >> there's a few companies. morgan stanley, bank of america, citigroup, that get lumped inn with the higher names. on the risk off days like yesterday they tend to underperform. irrespective of the fact that they have exposure to cypress or not. >> what about the smaller banks that you don't think will do as well? what happens to them for the rest of the year? do they decline? >> we think they underperform. we are biased of the bigger banks giving the evaluations are a little bit lower. they have more capital markets that we think will be a constructive place to be. and the environment that favors the smaller banks appears to be on hold at the moment. >> just before we let you go, which name excites you the most? >> overall, you know, i would say, i would say the bigger
banks, citigroup and jpn morgan come to mind. >> jason, good to see you. >> thank you. >> coming up next, the president and ceo of liberty media. he'll tell us what is next for liberty. and there's a real estate boom in miami. it's not americans feeling the comeback. who is buying and how they're dominating the markets. [ male announcer ] this is a reason to look twice. the stunning lexus es. get great values on your favorite lexus models during the command performance sales event. this is the pursuit of perfection. ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below...
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let's let's get to rick santelli in chicago with a look at credit risks and the market. rick? >> well, thank you, melissa lee. welcome rob. you're always a fascinating guest. we go way back in terms of services clients and transferring risks. let's talk about risks. when i look at europe i'm pretty much, to be honest with you, amazed at how tight the spreads are. >> they seem to be tight. let's remember that they are
controlling this to a certain extent. the fed is obviously providing relatively low interest rates here. but i think there are two different things that people need to look at. interest rate risk. on the credit risk side you have to really be concerned about the cds and interest rates. they're obviously held low. >> now where do we go? obviously the feds knee to keep rates on the low side. if we reach a tipping point before they pain the exit or signal an exit, there's a lot of leverage. nobody talks about leverage anymore. you and i were on the floor during periods like orange county. what do you see in terms of leverage? >> i think leverage is a real issue in the market. it's talked about within the market, but not necessarily in the public sector. and i think there's a tremendous amount going on. just take the example of you were the leverage by five-year notes.
85 basis points. finance at 15. you have a 70 basis point positive carry. if you leverage that up 10 to 1, you're getting 7%. that seems awfully attractive yield to the environment. if you leverage it up 20-1 you get 14%. if you're an investor in the feds fund or for the group, how are you going to feel when things change? >> is there anything that you're seeing at this point in time versus the history? are we less? significantly less? the same? >> i think it's really hard. but you have to know there's pockets. orange county had inverse floaters. long term capital in 1998, you know, also spread out across the world. they returned $2.7 billion to their investors so they could increase their leverage. that was prior to the asian con today onby russian default. then look at aig. another situation where they were massively selling cds, writing cds to increase their
profits and ended up dm a great deal of trouble. under the surface bernanke is concerned about this bubble. >> i've heard they're very big involved in the mortgage market. not enough. i think that if you're, you know, like endowment or a family office or a pension manager, you really need to go and examine, send your credit person there and see if the leverage being used to produce these superior returns is appropriate or manageable. >> so be ware of superior returns and low interest rate environment. and there may not necessarily be a memo when the feds are planning on exiting. i call it the tipping point. not sure when it occurs. make sure the risk officers are not asleep at the switch. thanks for being my guest, rob.
simon, back to you. >> i'm hoping most of them are prepared for higher interest rates, rick. thank you very. straight ahead on the program, why is john malone getting back into cable television? ♪
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hours're two and a half we're two and a half hours into trading. 11:30 here on wall street. boa shares have hit new 52-week highs and have risen 37% in the past six months. it's also upbeat day for the airlines. united, southwest and continental rising to new 12-month highs. we have an all time high. transports and arm holdings announcing warren easter is retiring as ceo effective july 1. east, who spent nearly 12 years on the job building it to the international company will be succeeded by the company krvice president. >> and bob, we're in the green across the board. >> a little chop we. we were about even, but it's better as the morning goes on. a couple of sectors are doing very well this morning.
the home builders are also doing very well. you can buy them all in one swoop here. at a five-year high. kb home, nice moves up, hovnanian. that's really an impressive day. what was going on here? it's very simple. it's firing on all sill dars right now. housing starts came in. the single family numbers. this is the way i look at it. year over year. multifamily starts. those are apartments. and all indicators are on the up side. household formations stalled out for three or four years after 2008 are pooufing up again. industries are at the lowest levels in many, many years and consumer confident is to the upside. simon mentioned the airlines, but one of the reasons the airlines are at new highs, ryan
air had a huge order for airlines. let's move on. move onto bond etfs. up again here. for a third day in a row. so while there has been gyrations in the stock market, right across the board, total bond market is up. the 20-yearlong-term bond treasuries, corporate bonds and high yield bonds. hyg, extremely popular, algs on the upside. when the stock market is fluttering around here, keep this in mind. here is the main way to invest in europe. the btk is the largest. english, france, germany and the netherlands. the biggest countries there. that's been gyrating around a little bit. that is the currency fluctuat n fluctuation. the euro happy weaker against the dollar in the last three months, as you can see. and that causes a problem if
you're going out and investing in dollars. there's a hedge etf for europe. this is a wisdom tree product. they out out the currency risk over in europe here. that is moving to the up side when you hedge out the risk. today it had a 2 million share order. the biggest order they ever had. somebody is paying attention and noticing these hedge etfs out there. >> let's check on where we are with the energies and commodities. sharon epperson is live. >> simon, we're seeing buying interest in the gold market. now a better part of 24 hours. again, being above 1610 is a key level that many traders are watching. other metals have looked higher. equities come off their highs. that is when we saw the highs in
the metals market. we're also keeping an eye on the energy benchmarks as well. keep your eye on gasoline and heating oil. they are drifting oil and they are the leaders that are the downturn in the energy market. that is really the leader here. zbr thank you very much, sharon epperson. liberty media is acquiring them for a cool $2.5 million. they are buying from three of the private equity holders. we are joined by greg of liberty media's president and ceo. a cnbc exclusive. greg, it's a pleasure to have you with us. >> thank you for having me. >> why now? how does this fit into your portfolio? >> well, i think you noted it's
rare when you have an opportunity to have the influence that liberty will like to have secondly, we've always been believers in the cable industry as a group. our sister company is the largest cable company outside the united states. and lastly, we see the opportunity with sustainable cash flows. a subscription business, finance at attractive rates as being an opportunity for liberty shareholders now. >> that's exactly the kind of company you went after in the past. the cash flow and subscription model. you had had a history taking an active role. this would also be the ace with up to four board seeds. the thinking is that could be in a position to gobble up further assets in smaller tiered markets. is that the direction u you would like to see the company
go? >> first, we have a lot of confidence. we see a lot of opportunity ahead. as you note, they've also been successful recently in an acquisition. the plan in those world markets has been successful. the base case, the base business and plan that the charter team has is excellent. >> give us the broader view of the cable industry if you can, greg. it wasn't too long ago you think about the pipes plus the content. one case in point is our parent company owning 100% of nbc universal. is this the trend that is -- i don't want to say the pressure, but a drive to the marge. >> well, traditionally liberty was a believer in the model with tci being a parent.
over time some of the lines have blurred. some people like comcast have gone in deeper with a more similar model. they split the model between time warner and time warner cable. we'll see what the future holds. the base business plan up graded to more high speed data, faster speeds. i think that's the current course and speed. >> good morning to you. morgan stanley is suggesting you may hit the balance to come back to the question of content in the cable industry. one area would be content cost pressure. whether you may take a more aggressive price, including dropping four suites of channels or pushing for sports networks to go into tears. how do you feel about the the two suggestions? >> well, i think the question of pressure from sports programming is a real one.
i think tom and his team are very focused on providing a great product to their customers that has the content that those customers want. we will endorse the efforts as they see fit. >> you didn't really answer the question. do you feel there will be a measure aggressive pushback to the content providers? >> i don't think it's going to come from liberty. they're going to drive that based on what they see their needs being. >> is 27% stake enough when you wake up down the road and see you're making an overture for the rest of the charer company, that is. >> well, we have the opportunity to increase the stake and then eventually up to 40% after that. so the potential is there and we'll see how prospects go. but we have no current plans
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coming up, will bernanke and company save the rally? and liesman is going to grade the traders as well.
blackrock with $116 million under management has a list of stocks you should buy right now. should they take such big risks with the public's money? tune in at the top of the hour. >> looking forward. thank you very much. developers are throwing now huge launch parties to presell the yuchbts. many of the buyers are foreign and they are paying cash. who are they? what do they plan to do? diana is in miami with the answers to so many questions. diana? >> that's right, simon. six years ago this was supposed to be a con do tour with hundreds of units. like so many projects, it never made it off the ground. okay, i lied. it made it up to the first floor. now the newly owned palms along with the rest of the con do
market is riseg from the ashes. it's also because of a huge influx of foreign cash. >> they're looking at this. they want something tangible. they want something bricks and mortar and they want something besides a low paying treasury bond. >> so foreign buyers lured by the high flying miami lifestyle and acrobatic showman ship of condo develop irs who claim the launch party of a condo is more important than any party or open house. the party is back on. miami heat translating to all cash buyers for canada, russia, venezuela, brazil and china. >> it doesn't get any better. i traveled all over the world. i really want to come back to miami. >> the prices are going to come up faster. so today is a great time to buy. >> south florida's coastal
markets have 103 towers proposed with 15,000 units. 16 of those towers already under construction. developers are often from abroad like this product from a chinese firm. >> of all the new condo units, 40% are by foreign national groups. they are selling the product in country to wherever they come from. whether it's china, brazil, israel or argentina. this is the redoing of miami. >> now rising with all the cranes are the miami condo prices, up 25% from a year according to the miami realtors. where are the red flags? we're going to tell you about them coming up. melissa? >> wow. >> thank you very much, diana. >> nice to see the trapeze artist has made a return to parties as well. >> i was worried about them.
>> let's go back to josh lip on the on headquarters. hain celestial rising today. analysts are fans. here's why. the survey of whole feeds and the fresh market showed positive demands and sale trends in the organic sector. the largest customer is whole foods, which sought mid to high single digit traffic growth on a year over year basis through early march. melissa, back to you. what would you do if the government planned to tax you? it could become a reality parliament will take you on the ground and get reaction from the people of cyprus. that's next. ♪
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hundreds, as you see there, protesting in cyprus just minutes before parliament begins debate on taxes. p he helps run his family's auto parts business there. >> caller: yes. hello. >> what has it been like? have you and your friends, your colleagues, been going to the banks and withdrawing money?
>> well, things here are very crazy right now. everybody is very anxious. everybody is waiting to see what the decisions are going to be. even people who tried in the beginning to take money out, they couldn't do it. everything is frozen. we just wait. we can't do anything more. >> are you concerned about conditions on the ground there? because we're watching as we're talking to you some pictures of the protests there. is there a fear of violence? >> no, i don't think so. i don't think things are going to go that far. filippos, we're having difficulty getting a sense of where the negotiations are on who will be taxed what. what is your impression of the concessions that may be being made at the moment for people who earn or have less than
20,000 or maybe 100,000 euros. what are you hear sing? >> well, we still don't know anything. they're going to say it's going to be a change from 20,000. still this doesn't really change anything because there is other people that are going to lose their money. so we just have to wait and see what's going to happen. >> filippos, do you believe your government when they say this is a one-time deal, and this is the only time it's going to happen? or do you think this is going to change the way you keep your money and your inclination to trust the banking system there? >> of course, yeah. still, i don't think you can trust them. if they say it's going to be only one time. because they did it with -- without even asking us. they just did it. so we lose the faith in them. we are not like trust nothing now. >> filippos, can you explain why this might become law if every
major political party in cyprus is saying that they won't vote for it? how possibly can it get through what is a very fractious parliament at the best of times? >> well, i don't have a -- i don't really know. so i just -- we just wait to see. because if they can't -- they cast out the pledge to give us what's -- what it's going to be, they change in the time, they're cancelling the decision. so we can't do nothing. we just have to wait for now. >> yeah, in the meantime, as a businessperson, how is your business being affected if people who want to get cash out of atms can no longer get cash out? i mean, what is happening generally to the economy now? >> well, people like things are a little bit slow today, because nobody takes checks, nobody goes buy stuff.
everybody just waiting. they only deal with cars right now. so think we have to stand still and wait. things are not moving right now. >> all right, filippos, thanks for sharing your insight with us. giving us the view from the ground in cyprus at this hour. we do want to take a quick check on where we stand in the markets. we have red arrows across the board here, with the dow down just 7 points. we did just turn negative. the s&p and nasdaq down a quarter of a percent. a real standout in this market. bank of america, whose shares are up 1.25% at this hour. and keep those tweets coming in celebration of the launch, the executives released a music video featuring the cover of etta james' "at last." so we want to know what song should apple executives record for their one-year dividend
anniversary? tweet us @squawkstreet. we'll read some of your answers next on cnbc. ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it. (announcer) at scottrade, our clto make their money do (ann) to help me plan my next move, i take scottrade's free, in-branch seminars... plus, their live webinars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody.
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let's send it to josh lipton for a quick market flash. hey, josh. >> hey, melissa. check out chesapeake energy taking a dive. analysts are not fans. they say chesapeake's current gas hedges dampen exposure to resurgent natural gas prices, and 2013 guidance is at risk. also say shares now appear more than fully valued at the current price. they downgraded the stock to underperform. price target 20 bucks. melissa, back to you. >> thank you very much, josh. ? >> in celebration of the pretend law enforcement, they released a cover of etta james' "at last." this isn't the first revamped song. in the past, they released "keep on loving you" in honor of the developers. that brings us to this morning's squawk on the street. blackberry released "at last." what should apple release in the
one-year anniversary. bill tweets, they should cover the rolling stones song, "emotional rescue" for the one-year anniversary. doug tweet, mo money, mo problems by notorious b.i.g. >> by the way, he didn't know what that was prior to this tweet. >> no problems. jimmy tweet, apple should have aretha franklin's r-e-s-p-e-c-t, enough said. and bill tweets "feels like the first time" by foreigner. >> interesting. >> in the heard that for a while. let's check on where we stand in the markets, because it does look like we're taking a leg lower here. we've got the nasdaq and the s&p 500 down by .4%. the dow as we mentioned before just turning negative. let's check on shares of lululemon. this is probably simon's favorite story. >> lululemon. >> and the transparent pants. this is what happens when you don't check the pants, you don't just sit there and stretch them out to s